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European Farmers Receive $143 Per Acre for 'Energy' Crops

The European Union has set an ambitious new goal to reduce its dependence on fossil fuels, and given its farmers ample financial incentives to reach those goals.

The new proposal is a target of 20% for renewables in EU energy consumption by 2020, and 10% minimum target for biofuels in transport fuel by the same date.

Agriculture officials here at GreenWeek, Europe's largest food and agriculture exhibition, praised the new goals.

"This is an excellent opportunity for European agriculture to play a part in one of the greatest challenges facing the European Union today," says EU Agriculture Commissioner Mariann Fischer Boel. "Our CAP (Common Agriculture Policy) reforms have already given biofuel production a major push — now I want to build on this further."

The CAP was changed in 2003 to encourage European farmers to grow energy crops like rapeseed, which is the most common oilseed used here to produce biodiesel. The CAP reform decoupled direct payments from production so farmers could base planting decisions more on market signals. The 2003 CAP reform introduced a 45 euro per hectare ($24 per acre) aid for land used for energy crop production. Countries are also allowed to grant national aid of up to 50% of the costs of establishing permanent crops on areas on which an application for the energy crop aid has been made.

According to Boel, getting 'up to speed in the production of bioenergy' could create up to 300,000 new jobs throughout Europe, many of which will be in rural districts.

Gerd Sonnleitner, President of the German Farmers' Association, says renewable energy now meets almost 7% of Germany's requirements for electricity, heating and fuel. The earlier target - 12.5% of the country's electricity needs from renewable sources by 2010 - has almost been reached.

"Bio-energy is experiencing a genuine boom and has evolved into one of the largest growth sectors on the German renewable energy market," says Sonnleitner. "65,000 jobs have been created, and this figure is set to double by 2010.

"Our farmers are now producing bio-energy and renewable raw materials on an area measuring some 4 million acres compared with just 2 million acres five years ago," says Sonnleitner. "This now amounts to 13% of the total cultivated area in Germany, making us the leaders in this field in Europe. An increase in the area under cultivation to as much as 7.5 million acres is being forecast.

A large part of the GreenWeek exhibit hall is dedicated to bioenergy under the title, "Plants for power in place of nuclear power plants."